How do you become wealthy? The conventional way has been to earn and invest in instruments that can be expected to deliver well. Fair enough. It has worked for many. But is there be a better way? After all, more financial instruments and asset classes are now on offer than before. And markets have got complicated and more volatile. Our aspirations too have risen.
Most experts the world over, including the motley group of qualified and certificated financial planners that have been growing in the past two decades, say that meeting financial goals is a better way of investing. The logic is simple: we save and invest today to be able to use the money tomorrow. If we are able to do all the things that we save up for, it means our objectives are met.
That’s the basic premise behind investment advisor Suresh Sadagopan’s book ‘If God Was Your Financial Planner.’
Explaining through real life cases
Sadagopan is also a registered investment advisor. His book is not a textbook on financial instruments, though Sadagopan spends a lot of time explaining mutual funds, insurance, loans, and other such financial products. But the book is more about financial planning and its importance in making your dreams come true.
He takes us through the world of financial planning with the help of case studies on seven families that came to him for sorting out their money and investment matters. The problems are pretty common; a family’s finances are in disarray due to an expensive lifestyle. A large, expensive house and a desire to send their two little children – a third is on its way – to international schools that call for sky-high fees add to the monetary stress. Another individual is on the verge of losing his job. Then, there is a couple that wants draw up a plan, but finds financial planner’s fees extravagant! And then there is a couple whose finances are hurt, thanks to bad investment decisions made by the husband, not to mention his recent job loss, which has made matters worse.
Taking spiritual inspiration
Most of the times, Sadagopan has the answers; but at times, he doesn’t. That’s when he turns to the Lord, much like the conversation between Arjuna and Lord Krishna in the Mahabharata before the start of the great war between the Pandavas and the Kauravas. Arjuna faces a moral dilemma over fighting his own cousins and extended family and Krishna declutters his mind and shows him the way. That’s the inspiration for the title of this book.
But if you keep the highly fictionalized and dramatic storytelling in this book aside, it gives you a good overview of what financial planning is all about. Keep an eye on the few such chapters that promise to bust some carefully cultivated myths.
Should you rent or buy a house? “Living in one’s own house is highly over-rated,” he writes. Sadagopan carefully breaks the myth of why it’s better to rent a house if you have just about started your family, are young and have little children and a family to support. He says that most of the times we think we’ve made a profit if our property prices rise. But if we add the interest cost – and he says that we should – then the gain is very little to zilch. And if you plan to buy a property to live on the rental income you get by letting out it out, think again, he says. The average yield is just 2 percent. Even a fixed deposit can often outperform your rental yield.
Is it necessary to pay through your nose to get your children admitted in an international school? And is foreign education for your child important? He points out that many times we sacrifice our own retirement corpus to fund our child’s foreign education. Parental funding is fine, so long as it doesn’t put a strain on your own finances. Exhausting your own retirement corpus and then depending on your children in your sunset years is not an option.
Sadagopan also delves deep into the justification of why financial planning comes for a fee. Most advisors across India face a asimilar challenge.
Overall, the book is an easy read. It makes you want to make money for having a more fulfilling and satisfying life.
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